KATE THOMPSON DAVY: Hamas’ attacks on ‘Silicon Wadi’ threaten global tech sector
Start-up nation Israel’s big tax-paying tech industry is set to take a knock from Hamas’ attacks
When fighting broke out in Gaza this weekend the news broke almost simultaneously on our mobile phones; ’tis the way of today. Immediately social platforms were awash with shocking videos and awful accounts, with both sides (and their supporters) quick to deploy the handy spin machine that is social media.
CNN reports that Israel is “pounding Gaza with deadly airstrikes, displacing more than 100,000 people and sending waves of injured Palestinians to overwhelmed hospitals” following surprise attacks by Palestinian militant group Hamas at the weekend.
We must acknowledge that a geopolitical and humanitarian crisis is unfolding before us, with the full scale of it yet to be revealed, but — as per my beat — with Israel’s positioning as a global tech hub this conflict also has implications for the tech sector that will be felt around the world.
The exact number of tech firms based in Israel is unclear. Deloitte Israel claims a figure of 6,000 active start-ups alone on its website. For decades the government has invested heavily in the fields of technology and science, attracted venture capital firms and encouraged entrepreneurs.
Israel likes to be known as “the start-up nation”, and indeed leads the “start-ups per capita” table. The focus has paid off. According to Reuters “high-tech industries have for a few decades been [Israel’s] fastest growing sector … accounting for 14% of jobs and almost a fifth of GDP”.
However, recent changes in government policy mean that even before the Hamas attacks of the weekend the tech industry party has been dampened by “uncertainty”. Reuters explains that a “growing number” of the country’s beloved baby tech firms have also incorporated in the US, chasing “deep-pocketed US funds and probusiness policies” — not ideal for an industry that accounts for 30% of Israel’s income tax.
In August, another Reuters piece on this “slowdown” trend warned that “entrepreneurs already appear to be voting with their feet”. Almost two months later, a quite different demand on the tech-skilled youth may be coming. An article in The Information cites two Israeli tech start-up CEOs reporting that roughly 10% of their in-country employees have been drafted into the country’s military reserves. Israel has long had a policy of mandatory military service for adult citizens, and as such many staffers of tech firms — locally and abroad — could be called up as part of the 300,000 reservist mobilisation.
There is also a significant group of traditional and big tech firms with presence and assets in the region. Intel, for example, is among the largest employers in Israel, which hosts one of the company’s biggest chip design and fabrication facilities. There has been no confirmation that production will be affected, but Intel shares took a knock on Monday nonetheless. Tower Semiconductors told Reuters it was operating as normal, but the markets still took a 4.9% bite out of its share price.
It’s hard to do productivity and Powerpoint with missiles roaring overhead — not to mention the genuine loss of life my light words here belie.
Google maintains a staff complement of roughly 600, IBM 2,000 and Microsoft 750. Nvidia has cancelled an artificial intelligence summit planned for Tel Aviv midmonth, and that’s just the tip of the conference-meeting-and-business-as-usual iceberg for the Middle East’s Silicon Valley, or “Silicon Wadi”. It’s hard to do “productivity and Powerpoint” with missiles roaring overhead — not to mention the genuine loss of life my light words here belie.
Akin to the early days of the Russian invasion of Ukraine, disparate groups of hacking activists have targeted websites using tactics such as distributed denial-of-service attacks to essentially shut them down, including Israeli newspaper The Jerusalem Post.
The International Committee of the Red Cross’s published guidelines just last week for the activities of “hacktivists” in military conflict, including that civilian sites be left unharmed. The Red Cross called civilians engaging in digital warfare “a worrying trend”. The hacktivists, for their part, seem undeterred by the critique.
And speaking of undeterred … Elon Musk is once again facing censure for allowing the spread of disinformation about the conflict on the social platform now called X. CNN called the fake news and misleading video content on X “information chaos”. CNBC reports that X flagged several posts as misleading or false, but “dozens of posts with the same videos and captions were not flagged by X’s system”, and not before millions of people had seen them.
Musk himself even recommended (to his 158-million followers) an account with a proven record of spreading falsehoods such as a nonsense report of an explosion at the Pentagon earlier in 2023. He later deleted his post and added: “As always, please try stay as close to the truth as possible, even for stuff you don’t like” — which is honestly like a Mad Libs for a post-truth era slogan.
Since buying the company previously known as Twitter Musk has stripped down content moderation teams and policies, and introduced an infinitely exploitable paid tier — a blue check mark available to anyone for just $8 or so — that has been used by scammers and propagandists to lend legitimacy to their falsehoods.
Now more than ever we need to be vigilant and sceptical of everything we see on social media. Citing Israeli analysis firm Cyabra The Guardian says as many as one in five (20%) of social media accounts “participating in online conversations about the Hamas attacks and their aftermath are fake”.
About 18 months ago, as Russian tanks rolled onto Ukrainian soil, I wrote in this column about the world’s first “TikTok war”. That’s what the Guardian and others dubbed that still-continuing conflict, playing out as it did on small screens clutched in hands around the world.
Now, I’m wondering what pithy moniker the world will ascribe to this disaster, and how inadequate it will feel to us months down the line.
• Thompson Davy, a freelance journalist, is an impactAFRICA fellow and WanaData member.
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